[Federal Register Volume 73, Number 65 (Thursday, April 3, 2008)]
[Notices]
[Pages 18276-18278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-6956]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-08-77-A (Auction 77); DA 08-543; AU Docket No. 08-32]


Closed Auction of Licenses for Cellular Unserved Service Areas 
Scheduled for June 17, 2008; Comment Sought on Competitive Bidding 
Procedures for Auction 77

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of licenses for Cellular 
Unserved Service Areas, with bidding scheduled to commence on June 17, 
2008 (Auction 77). This document also seeks comments on competitive 
bidding procedures for Auction 77.

DATES: Comments are due on or before April 4, 2008, and reply comments 
are due on or before April 11, 2008.

ADDRESSES: Comments and reply comments must be identified by AU Docket 
No. 08-32; DA 08-543. Comments may be filed electronically using the 
Internet by accessing the Federal Communications Commission's 
(Commission) Electronic Comment Filing System (ECFS) at http://www.fcc.gov/cgb/ecfs. Filers should follow the instructions provided on 
the Web site for submitting comments. The Wireless Telecommunications 
Bureau (Bureau) requests that a copy of all comments and reply comments 
be submitted electronically to the following address: 
[email protected]. In addition, comments and reply comments may be 
submitted by any of the following methods:
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail (although the Bureau 
continues to experience delays in receiving U.S. Postal Service mail). 
All filings must be addressed to the Commission's Secretary, Attn: WTB/
ASAD, Office of the Secretary, Federal Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. Eastern Time (ET). All hand 
deliveries must be held together with rubber bands or fasteners. 
Commercial overnight mail (other than U.S. Postal Service Express Mail 
and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol 
Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: [email protected] or telephone: 202-
418-0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For auction legal questions: 
Sayuri Rajapakse at (202) 418-0660. For general auction questions: Roy 
Knowles or Barbara Sibert at (717) 338-2868. Mobility Division: For 
service rule questions: Erin McGrath (legal) or Gabriel Ubieta 
(technical) at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 77 Comment 
Public Notice released on March 21, 2008. The complete text of the 
Auction 77 Comment Public Notice, including Attachment A, and related 
Commission documents, are available for public inspection and copying 
from 8 a.m. to 4:30 p.m. ET Monday through Thursday or from 8 a.m. to 
11:30 a.m. ET on Fridays in the FCC Reference Information Center, 445 
12th Street, SW., Room CY-A257, Washington, DC 20554. The Auction 77 
Comment Public Notice and related Commission documents also may be 
purchased from the Commission's duplicating contractor, Best Copy and 
Printing, Inc. (BCPI), 445 12th Street, SW., Room CY-B402, Washington, 
DC 20554, telephone 202-488-5300, facsimile 202-488-5563, or you may 
contact BCPI at its Web site: http://www.BCPIWEB.com. When ordering 
documents from BCPI, please provide the appropriate FCC document 
number, for example, DA 08-543. The Auction 77 Comment Public Notice 
and related documents also are available on the Internet at the 
Commission's Web site: http://wireless.fcc.gov/auctions/77/ 77/, or by 
using the search function on the ECFS Web page at http://www.fcc.gov/cgb/ecfs/.

I. Licenses To Be Offered in Auction 77

    1. By the Auction 77 Comment Public Notice, the Bureau announces an 
auction of licenses to provide cellular service in two different 
unserved areas (Auction 77), with bidding scheduled to commence on June 
17, 2008. The spectrum to be auctioned is the subject of two groups of 
pending mutually exclusive long-form applications (FCC Forms 601) for 
unserved area licenses in the Cellular Radiotelephone Service. 
Participation in Auction 77 will be limited to those applicants 
identified in Attachment A of the Auction 77 Comment Public Notice. 
Licenses will be auctioned for each mutually exclusive applicant group 
(MX Group) identified in Attachment A of the Auction 77 Comment Public 
Notice. The winning bidder in each group will be licensed to serve only 
the unserved area proposed in its long-form application(s) for that MX 
Group.
    2. In MX Group FGN001, one of the applicants, E.N.M.R. Telephone 
Cooperative (ENMR), has filed two applications that propose different 
Cellular Geographic Service Areas (CGSAs). ENMR was required by the 
Commission's rules to file two separate applications for these CGSAs. 
Because ENMR's applications are not mutually exclusive with each other, 
but each of these applications is mutually exclusive with the competing 
applicant in the MX Group, if ENMR qualifies to bid in the auction, it 
will submit one bid for the opportunity to have both of its 
applications processed in the event that it is the winning bidder in MX 
Group FGN001.

II. Bureau Seeks Comment on Auction Procedures

    3. Consistent with the provisions of 47 U.S.C. 309(j)(3), the 
Bureau seeks comment on the following issues relating to Auction 77.

A. Auction Design

i. Single-Round Sealed-Bid Auction Design
    4. The Bureau proposes to award the licenses included in Auction 77 
using a single-round sealed-bid auction. The Bureau proposes to use the 
single-round format because the informational advantages of a 
simultaneous multiple-round auction are not necessary here. Because a 
bidder can only bid on a single cellular unserved area, bidders do not 
need the information afforded by a simultaneous multiple-round auction 
to consider valuations, alternative business

[[Page 18277]]

plans, or backup strategies. The Bureau seeks comment on this proposal.

B. Auction Structure

i. Round Structure
    5. The Commission will conduct Auction 77 over the Internet, and 
telephonic bidding will be available as well. The toll-free telephone 
number for the Auction Bidder Line will be provided to qualified 
bidders. The start and finish time of the bidding round will be 
announced in a public notice to be released at least one week before 
the start of the auction.
    6. The single-round sealed-bid format will consist of one bidding 
round followed by the release of auction results. In the event of tied 
bids in an MX Group, the Commission will post an announcement in the 
FCC Auction System to announce an additional round of bidding for that 
MX Group. The Bureau seeks comment on this proposal.
ii. Information Relating to Auction Delay, Suspension, or Cancellation
    7. For Auction 77, the Bureau proposes that, by public notice or by 
announcement during the auction, the Bureau may delay, suspend, or 
cancel the auction in the event of natural disaster, technical 
obstacle, administrative or weather necessity, evidence of an auction 
security breach or unlawful bidding activity, or for any other reason 
that affects the fair and efficient conduct of competitive bidding. In 
such cases, the Bureau, in its sole discretion, may elect to resume the 
auction or cancel the auction in its entirety. Network interruption may 
cause the Bureau to delay or suspend the auction. The Bureau emphasizes 
that exercise of this authority is solely within the discretion of the 
Bureau. The Bureau seeks comment on this proposal.

C. Bidding Procedures

i. Upfront Payments and Bidding Eligibility
    8. The Bureau has delegated authority and discretion to determine 
an appropriate upfront payment for the cellular unserved area licenses 
being auctioned. A bidder's upfront payment is a refundable deposit to 
establish eligibility to bid in the auction on the cellular unserved 
area license(s) for which the applicant submitted an application. 
Upfront payments protect against frivolous or insincere bidding and 
provide the Commission with a source of funds from which to collect 
payments owed at the close of the auction.
    9. For Auction 77, the Bureau proposes to set the upfront payment 
at $500 for each applicant. The unserved areas and the proposed upfront 
payment are listed in Attachment A of the Auction 77 Comment Public 
Notice. The Bureau seeks comment on this proposal.
ii. Reserve Price or Minimum Bid
    10. In light of 47 U.S.C. 309(j), the Bureau proposes to establish 
a minimum bid amount at $500 for each of the two cellular unserved 
areas in Auction 77. For each unserved area, the proposed minimum bid 
amount is listed in Attachment A of the Auction 77 Comment Public 
Notice. The Bureau seeks comment on this proposal.
    11. If commenters believe that the proposed minimum bid amount is 
not a reasonable amount, they should explain why this is so, and 
comment on the desirability of an alternative approach. Commenters are 
advised to support their claims with valuation analyses and suggested 
amounts or formulas. In establishing minimum bid amounts, the Bureau 
particularly seeks comment on such factors as the amount of spectrum 
being auctioned, the availability of technology to provide service, the 
size of the service areas, issues of interference with other spectrum 
bands and any other relevant factors that could reasonably have an 
impact on valuation of the license or licenses being auctioned. The 
Bureau also seeks comment on whether, consistent with 47 U.S.C. 309(j), 
the public interest would be served by having no minimum bid amount or 
a higher minimum bid amount.
iii. Minimum Acceptable Bids
    12. Eligible bidders will be able to place a bid in any whole 
dollar amount equal to or greater than the minimum bid for each 
cellular unserved area. Bidders will not be permitted to withdraw a 
bid. The Bureau seeks comment on this proposal.
iv. Provisionally Winning Bids and Tied Bids
    13. At the end of the bidding round, the winning bid for each 
cellular unserved area will be determined based on the highest bid 
amount received for the area. The result will be announced shortly 
after the close of the bidding round.
    14. In the event of identical high bid amounts being submitted in a 
cellular unserved area (i.e., tied bids), the Bureau proposes to allow 
an additional bidding round or rounds, if necessary, for bidders to 
submit higher bids for the cellular unserved area with tied bids. The 
minimum bid for the next round will be calculated by rounding the tied 
bid amount up to the next highest $100. The license(s) will be assigned 
to the bidder submitting the highest bid in the additional round. If no 
bids are placed in the additional round, the license(s) will be 
assigned to the bidder placing the tied bid in the previous round with 
the highest random number, a random number having previously been 
assigned to each bid. If there is a tie for the winning bid in the 
additional round, the FCC may add another tie-breaking round or rounds, 
or stop the auction without assigning the license(s).
    15. The Commission will announce the schedule for a subsequent 
round via an announcement in the FCC Auction System, concurrent with 
the release of round results. The Bureau seeks comment on this 
proposal.

D. Considerations Relating to Certain Post-Auction Payment Rules

i. Additional Default Payment Percentage
    16. Any winning bidder that defaults or is disqualified after the 
close of an auction (i.e., fails to remit the required down payment 
within the prescribed period of time, fails to make full payment, or is 
otherwise disqualified) is liable for a default payment under 47 CFR 
1.2104(g)(2). This payment consists of a deficiency payment, equal to 
the difference between the amount of the bidder's bid and the amount of 
the winning bid the next time a license covering substantially the same 
spectrum and geographic area is won in an auction, plus an additional 
payment equal to a percentage of the defaulter's bid or of the 
subsequent winning bid, whichever is less.
    17. The percentage of the bid that a defaulting bidder must pay in 
addition to the deficiency will depend in part on the auction format 
ultimately chosen for a particular auction, if the license is 
subsequently reauctioned. In non-package auctions, the amount can range 
from three percent up to a maximum of 20 percent, established in 
advance of the auction and based on the nature of the service and the 
inventory of the licenses being offered.
    18. For Auction 77, the Bureau proposes to establish an additional 
default payment of 20 percent. As previously noted by the Commission, 
defaults weaken the integrity of the auction process and impede the 
deployment of service to the public, and an additional default payment 
of more than three percent will be more effective in deterring 
defaults. The Bureau proposes the maximum 20 percent default payment 
for Auction 77. Since

[[Page 18278]]

Auction 77 is being conducted strictly to resolve conflicts between 
entities in two cellular unserved areas that were unable to resolve 
their mutually exclusive applications, a default by the winning bidder 
would suggest that the bidder has not made a good-faith effort to abide 
by FCC license assignment procedures, thereby weakening the integrity 
of the auction process. The Bureau proposes to impose the maximum 
payment percentage to deter such behavior. The Bureau seeks comment on 
this proposal.

III. Commission's EX PARTE Rules

    19. This proceeding has been designated as a permit-but-disclose 
proceeding in accordance with the Commission's ex parte rules, 47 CFR 
1.1200-1.1216. Persons making oral ex parte presentations are reminded 
that memoranda summarizing the presentations must contain summaries of 
the substance of the presentations and not merely a listing of the 
subjects discussed. More than a one or two sentence description of the 
views and arguments presented is generally required. Other rules 
pertaining to oral and written ex parte presentations in permit-but-
disclose proceedings are set forth in 47 CFR 1.1206(b).

Federal Communications Commission.
William W. Huber,
Associate Chief, Auctions and Spectrum Access Division, WTB.
 [FR Doc. E8-6956 Filed 4-2-08; 8:45 am]
BILLING CODE 6712-01-P